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9-08-2015, 18:27

Trade and colonies in the Indian Ocean

By 1600, the Portuguese had become one of the many players in Indian Ocean trading ventures, shipping spices, precious metals, horses, and other goods, often in partnership with Asian merchants. They had a string of fortifi ed trading posts and a few churches, but had not signifi cantly altered centuries-old patterns of commerce involving merchants from different regions. That changed with the entry of the Dutch and then the British into Asian waters. In the last decade of the sixteenth century, large well-built Dutch ships, often captained by mariners who had worked for the Portuguese, sailed to South and Southeast Asia, returning with huge quantities of spices. So many ships went, in fact, that Dutch markets were fl ooded with spices, which depressed the price and reduced profi ts. This situation led Dutch merchants in 1602 to agree to pool their resources in a new form of commercial enterprise, the United East India Company (Vereenigde Oost-Indische Compagnie, abbreviated VOC), which was given a national monopoly on trade with the east by the Dutch States General. The VOC separated managers from investors, who now bought permanent shares in the company rather than simply backing a single expedition; profi t was given annually to investors, based on all the company’s operations together, so that risk was minimized. This form of business organization became known as a “joint-stock company,” and was later adopted by other companies in the Netherlands and elsewhere. Investment in joint-stock companies became generally profi table – though there were spectacular collapses – and increasingly fashionable; the circle of investors grew to include men and women with only a small amount of disposable income, as well as major merchants and bankers. The States General provided fi nancial support to the VOC in its early years and granted it political sovereignty over the territories under its control, allowing it to build forts, appoint governors, maintain armies and navies, and wage war against indigenous states. The VOC initially worked from fortifi ed trading posts, many of which were captured from the Portuguese. Its managers, under the leadership of a governor-general, decided that the force of the Dutch navy could allow the company to reorganize the trading network to favor its interests. Dutch forces captured the Javanese port of Jakarta in 1619, renaming it Batavia, and the VOC established a naval base and ship-building yard there. The managers made alliances with Chinese merchants already living in the area, who set up sugar plantations and organized the recruitment of laborers from China for the sugar crop and for harvesting timber for ships and export. Dutch forces also defeated those of many small states in the East Indies, Ceylon (modern Sri Lanka), and the coast of India where spices were produced or traded; these were often bloody battles and the Dutch sometimes enslaved the remaining population and forcibly transported them to a different location to work. By the 1680s, the islands surrounding Batavia had become Dutch colonies and the VOC had a worldwide monopoly on spices. The Indian Ocean network was being radically transformed from one of partnerships to one in which Asian merchants were more dependent, though local and Chinese traders continued to make healthy profi ts. Dutch colonies also included several strongholds captured from the Portuguese in India, and Cape Town on the south coast of Africa, which became an important resupply point for ships. The Dutch were active in carrying goods of all types around Asia as well – what was termed in this era the “country trade” – making large profi ts from transporting Japanese silver to China, Chinese porcelain to India and Japan, and Indian opium to China. The Dutch colonies in and around the Indian Ocean had mixed populations, of which European employees of the VOC were a tiny number; even in Batavia, the largest colony, Europeans were less than 10 percent of the population. Most Europeans were soldiers and sailors, and the vast majority of them were men. The VOC allowed employees who had served their time to stay on as “free burghers,” but their numbers were very small, other than in Cape Town, where free burghers and other settlers – called “Boers,” the Dutch word for farmer – began to move out into the countryside in the eighteenth century to raise crops and livestock. Along with European, indigenous, and mixed-race people, many Dutch colonies included signifi cant numbers of free Asians who came from elsewhere, and all included large numbers of slaves; one recent estimate fi nds that enslaved people made up between one-third and two-thirds of the population in Dutch East Indian cities. Until the 1660s, most enslaved people were from South Asia, and after this from Southeast Asia and Africa; some were directly owned by the VOC, but most by private individuals. They were used primarily as domestic laborers with a range of tasks, though some worked in mining, shipping, and agriculture, especially on spice and sugar plantations. Outright slavery was only one type of forced labor system in the East Indies. Chinese merchants brought in from China unskilled laborers – later called “coolies,” a word that is now seen as derogatory in many areas – with terms of employment that were close to slavery. Immigration by Chinese laborers into Batavia was technically illegal, but Dutch authorities looked the other way as the Chinese were needed for sugar production; this situation kept labor cheap and the price of sugar relatively low. It was not low enough to compete with sugar produced by slave labor in Brazil, however, and, when the bottom fell out of the sugar market in 1740, unemployed Chinese laborers were ordered to be shipped to VOC tea plantations on Ceylon. Rumors spread that they would actually be thrown overboard on the way, laborers rioted, and VOC authorities responded by searching and looting all Chinese houses in Batavia. In a three-day wave of violence, every Chinese resident of the city was killed, probably totalling around 10,000 people. There were calls for an investigation, but these went nowhere. The toleration for diversity in their homeland that contributed to Dutch fi nancial successes in Europe was much more limited in the colonies. While the massacre in Batavia had no immediate ramifi cations, it was symptomatic of the VOC’s growing inability to deal with the consequences of exploitation and to respond effectively to economic and political developments. The VOC was also slow at recognizing changing consumer demands in Europe, sticking with spices, which had always provided a solid profi t, rather than investing in new commodities that had a much larger potential market. There was some change. Tea and coffee, for example, represented about 25 percent of the value of all goods imported into Amsterdam from the East Indies in 1780, whereas a hundred years earlier they had not been imported at all; during the same period, the share represented by spices dropped from 60 percent to 35 percent. Figures for other ports in other countries showed an even more dramatic shift, however, and the Dutch share of international trade declined steadily. Expenditures regularly outweighed revenues in the latter half of the eighteenth century, and the company was disbanded in 1799. Dutch preeminence in the Indian Ocean ended not only because of problems within the VOC, but also because of the rising power of the VOC’s English competitor, the English East India Company. The EEIC actually received its charter two years earlier than the VOC, in 1600, but strong Dutch pressure in the East Indies led English merchants to concentrate on India. Company envoys spent much of the seventeenth century requesting an imperial decree, or farman , from the powerful Mughal rulers of India granting them regular trading privileges throughout the Mughal Empire. They were given privileges in a few areas, including Bombay on the west coast, but even these were revoked when the company declared war on the Mughals in 1686 to speed up the process and lost disastrously. Only abject apologies – including full prostration in front of the Mughal emperor – and a large fi ne persuaded the emperor to allow them back in. The EEIC then concentrated on trade through Madras and Calcutta on the east coast of India, dealing less in spices and more in new types of consumer goods, especially cotton and silk textiles, saltpeter (for gunpowder), and, by the eighteenth century, tea and opium. British trade in and around India increased dramatically in the fi rst half of the eighteenth century. In contrast to the VOC, which at least in theory forbade its agents to do business privately, the EEIC encouraged this. Individual British merchants along with small companies called syndicates began to specialize in the “country trade” around Asia, making alliances with Indian partners. High demand in Europe for Indian goods, and in China for Indian opium, allowed for profi ts at all stages of trade. The EEIC also continued to push for an empire-wide farman , and in 1716, after the company threatened to pull all its business out of western India, the Mughal emperor Farrukhisiyar fi nally agreed. This action opened the way for the EEIC to intervene in the political affairs of India as the company defended its growing economic power. During the next several decades, company agents and private English traders, often allied with wealthy Indian merchants, took advantage of the declining power of the Mughal state and commercial opportunities of all types to expand their spheres of operation. They made treaties with Indian princes and conducted military operations, acting more like a sovereign state than a private company. In the 1740s, the British and the French backed opposing contestants for the rule of several states in southern India, thus mixing European and local rivalries. Warfare spread back and forth for several decades, becoming part of the Seven Years War, with the British ultimately victorious, in part because they were better able to pay for Indian troops (called sepoys) who did much of the actual fi ghting and provided key information about the plans of rival forces. Several key battles were won through the military abilities of Robert Clive (1725–74), who began his career in India as a teenaged clerk and bookkeeper in the EEIC. When hostilities broke out between the British and the French, Clive joined the private army of the EEIC, and proved to be a very able commander. After a brief stay in England, he went back to India as a governor and military leader, and defeated a large French-backed force to secure Bengal for British interests. Clive was well rewarded fi nancially by the EEIC and its Indian allies, and when he returned to England he became a Member of Parliament. Unrest in India drew him back again, and he helped to broker an agreement in 1764 granting the EEIC direct rule of the province of Bengal in northeastern India and several other parts of the subcontinent; Clive became the fi rst governor-general of Bengal. Other territories had indigenous rulers, but they too were allied with the EEIC. Inquiries began in Parliament about the wealth Clive had accumulated, however. He had also long suffered from what was probably manic depression and various physical ailments, which he eased by the use of opium. All of these factors converged, and Clive committed suicide at the age of forty-nine. In the heroic view of British imperialism – the 1911 Encyclopedia Britannica provides a good example of this – Clive was regarded as the founder of the British Empire in India, though more recent scholarship has seen the process as slower and more complex. As the EEIC acquired more political power, the relationship between its representatives and local merchants changed from partnership to clientage, and the company was able to dictate terms and cut into the profi ts of local suppliers. In 1773, for example, the governor-general of Bengal established a monopoly on the opium trade in India; the Chinese emperor had banned the smoking of opium in 1729, so the EEIC auctioned its opium to private British merchants, who then smuggled it into China, with all parties gaining solid profi ts. (In the nineteenth century, Britain fought two wars to force China to allow unrestricted opium imports.) Despite signifi cant Indian resistance to British political and economic measures and a series of wars throughout the rest of the eighteenth century, British power in India continued to expand. Historians hotly debate the extent to which imperial ambitions shaped the British takeover of India. Some view the whole process as somewhat accidental, with the EEIC and the British government simply responding to economic and political developments with no clear plan. Others see empire-building as a defi ned aim throughout the eighteenth century or even earlier. Still others note a change in the 1740s and 1750s, and use the transformation of Robert Clive from bookkeeper to general and governor as a symbol of this change. The VOC and the EEIC were not the only European trading companies in the Indian Ocean basin. France, Denmark, Portugal, and Sweden all chartered East India Companies modeled on and designed to compete with those of the Dutch and the English. They were far less successful, however, because they depended more on government support than on private investment, lacked long-range planning, and simply could not compete with the far larger and more established Dutch and British companies.

 

 

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